Hong Kong company formation
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Offshore company in
option for international trade
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Hong Kong company formation key features
There is no ‘offshore’ legislation in Hong Kong, all companies are incorporated under the same legislation regardless of whether they do business on or offshore. However, companies that do not derive any income from sources in Hong Kong are not subject to tax thereby effectively making it an offshore company in all but name. An excellent infrastructure and strong regulatory framework are contributors to the success of Hong Kong as a major destination for business.
Hong Kong is one of the world most established and reliable financial centres. The economy in Hong Kong is considered to be one of the freest in the world (as measured by the Index of Economic Freedom) therefore it is an excellent jurisdiction in which to incorporate a company.
According to the study of 189 economies, Hong Kong has one of the most tax-friendly economies in the world. Why? The city only imposes three direct taxes and has generous allowances and deductions which reduce your taxable amount.
- Profits tax is capped at 16.5 percent
- Salaries tax is a maximum of 15 percent
- Property tax is 15 percent
More important are the tax exemptions in Hong Kong:
Hong Kong companies top benefits
Hong Kong is a major trading entity and therefore the incorporation of a Hong Kong company is likely to be perceived as ‘legitimate’ and therefore less likely to be seen as a tax avoidance/minimisation vehicle.
All banks in HK are under the HK law, not to disclose any customer’s information to anyone without the customer’s prior consent, except if the customer is suspected for money laundry or criminal offence, or the HK Inland Revenue Department suspects that he/she has evaded HK taxes (not taxes in other countries). Further the HK Inland Revenue Department is not allowed by the HK law to disclose any information to anyone, including local or overseas governments.
Hong Kong bank account
Thus, we have developed a banking network and expertise which enables us to open accounts for all companies we register. Obviously, the final decision to open an account depends on the bank, but our account opening success rate is close to 95%.
Our professional status as “International Corporate Service Provider” and our signing of a good conduct charter give us the status of “eligible introducer” in the eyes of financial establishments in general.
As a result of this, opening an account and managing the dossier are much simpler; we send the banking file directly to our clients. We can also open bank accounts by correspondence for the majority of banks we work with.
Our company provides professional advice on selection and collaboration with well-established bank for each client individually; we undertake a full set of services on the organization of cooperation with the most reputable and respected banks.
Our clients refer to us as being fast, accurate, responsive but yet very affordable. TBA & Associates kept up that reputation for years and the company is appreciated by the community of world financial institutions. We are pleased to know that the communication between the bank and our clients is most productive from the point of view on receiving concrete high-quality services by mutually beneficial obligations.
Hong Kong Company Formation FAQs
What are the types of company structures in Hong Kong?
There are three types of company structures in Hong Kong: offshore companies, local companies, and new companies.
- Offshore companies are not subject to the Companies Ordinance, which is the primary law governing companies in Hong Kong.
- Local companies are subject to the ordinance, but they are not required to pay taxes on their profits.
- New companies are required to pay taxes on their profits, but they may be exempt from some of the requirements of the ordinance.
The most common type of company structure in Hong Kong is the offshore company. These companies are typically established to carry on business outside of Hong Kong. They are not subject to the jurisdiction of the Hong Kong courts and are not required to file annual returns. Offshore companies are also not subject to taxation in Hong Kong.
The second most common type of company structure in Hong Kong is the local company. These companies are typically established to carry on business within Hong Kong. They are subject to the jurisdiction of the Hong Kong courts and are required to file annual returns. Local companies are also subject to taxation in Hong Kong.
The third type of company structure in Hong Kong is the new company. These companies are typically established to carry on business within or outside of Hong Kong. They are required to pay taxes on their profits, but they may be exempt from some of the requirements of the Companies Ordinance.
New companies may also be exempt from taxation in Hong Kong. The choice of company structure will depend on several factors, including the nature of the business and its intended purpose. When choosing a company structure, it is important to seek professional advice to ensure that you choose a structure that is right for your business.
Why choose Hong Kong as a regional centre for doing business?
It’s also worth noting that Hong Kong is an incredibly diverse and cosmopolitan city. Located at the crossroads of East and West, it’s the perfect place to do business with companies from all over the world. And with its world-class infrastructure and convenient transportation links, it’s easy to get around and do business in Hong Kong.
In short, there are plenty of good reasons to choose Hong Kong as a regional centre for doing business. With its business-friendly environment, world-class infrastructure, and convenient location, it’s the perfect place to start or expand your business.
What are the tax and legal considerations in Hong Kong?
However, businesses are still required to file a corporate tax return, and profits tax and pay withholding tax on dividends and interest payments. Nonetheless, the overall tax burden in Hong Kong is relatively low compared to other jurisdictions, making it an attractive destination for businesses.
How is the company registration process in Hong Kong?
Starting a business is an exciting time, but it’s important to understand the steps involved in the company registration process.
- The first step is to obtain a business registration certificate from the Companies Registry.
- Next, you will need to determine your share capital and business licenses. Once these incorporation documents are in order, you will need to register your business address with the Companies Registry.
- Finally, you will need to appoint a company secretary.
Once all of these steps have been completed, your business will be officially registered in Hong Kong.
What are the documents needed for a company’s registry in Hong Kong?
Articles of Association for your company
When registering a company in Hong Kong, the Articles of Association (AA) act as the company’s constitutional document. This means that the AA sets out the rules and regulations governing the company’s internal affairs, including how the company will be run and managed.
In addition, the AA also sets out the rights and duties of the company’s members (i.e., its corporate shareholders). For these reasons, the AA must be carefully drawn up before registering a company in Hong Kong.
Otherwise, there may be disputes later on down the line about how the company should be run. industries in Hong Kong.
Business registration certificate
A business registration certificate for the company is needed when registering a company in Hong Kong. This certificate is important because it shows that the company is registered with Industry Hong Kong and that the company name is valid.
The certificate also helps to prevent fraud and to ensure that the company is properly formed. without this certificate, it would be very difficult to do business in Hong Kong.
Therefore, it is essential for any company that wants to do business in Hong Kong to obtain a certificate.
A duly filled company registration form
A company registration form must be duly completed and filed with the Companies Registry to register a company in Hong Kong. The form must include the company’s proposed name, physical address, local address, share capital and business activities.
The form must also list at least one director of the company. This information is necessary for the Companies Registry to properly identify and record the company’s information. Without this registration form, a company cannot be officially registered in Hong Kong.
What are the ongoing compliance requirements for Hong Kong company formation?
In addition, you’ll need to comply with industry-specific regulations if your company is engaged in certain activities. As a new Hong Kong company and a new business, you’ll also need to have a registered business address in Hong Kong. Failure to comply with these requirements can result in penalties, so it’s important to be aware of them from the outset.
What are the advantages of registering Hong Kong companies?
There are many advantages to registering a Hong Kong company. One of the biggest advantages is that you can get started quickly and with minimal hassle. The process of setting up a company in Hong Kong is relatively simple, and you can often have your company up and running within a matter of days.
Another big advantage of registering a Hong Kong company is that you can enjoy low tax rates. Hong Kong has a very favourable tax regime for businesses, and this can save you a lot of money in the long run. Additionally, a Hong Kong company can give you a greater degree of flexibility in how you structure your business. For example, you can choose to have a sole proprietorship, partnership, or limited liability company.
Finally, registering a Hong Kong company can help to boost your business’s credibility and reputation. A Hong Kong company is seen as being more reliable and trustworthy than one registered in other jurisdictions, and this can give your business an edge in the marketplace.
Time to open company!
How long does a company registration in Hong Kong take?
In most instances, it will only take five to seven working days to get the company incorporated. But if you are abroad, the process may take a little longer because of logistics related to signing and sending documents.
However, and should you wish or feel more comfortable on this initial stage not to travel to HK, our services can take care of the whole incorporation process remotely. All support will be provided in terms of documents required and respective certifications.
What types of businesses are most suited for Hong Kong company formation?
Utilising Hong Kong for International Trade
Hong Kong has long been considered the “Gateway To China” and not surprisingly, it is one of the largest investors into China, and the most commonly used location for foreign companies to base their international trading operations – whether it be sourcing products from China to sell into overseas markets, creating joint ventures with local Hong Kong or Chinese companies, or setting up Wholly Foreign Owned Enterprises in China to sell products and services locally – in one of the world’s largest and fastest growing economies.
Now a special administrative region of China, Hong Kong has a very deep rooted competitive business doctrine demanding low taxation. The current rate of corporate income tax is just 16.5% and this is only applied on a territorial basis thus earnings outside Hong Kong are not taxed and there is no imposition of capital gains taxation.
The basic concept central to most trading structures set up by foreign companies using a Hong Kong trading entity is that of outsourcing their back-office functions, while retaining full control of their international trading business.